Table of contents
- What is a Dark kitchen?
- What is the Dark kitchen business model?
- How to start a Dark kitchen in India?
- What is a multi-brand Cloud kitchen?
- Advantages of Dark kitchens
- Disadvantages of Dark kitchens
- Alternatives to Swiggy and Zomato?
- Billing software and SlickPOS for Dark kitchens
What is a Dark kitchen?
Dark kitchens/Ghost kitchens/Cloud kitchens are restaurants that prepare food directly for takeaway. Compared to the usual dine-in and takeaway format, the orders are placed online so that the public need not visit the premises.
These Dark kitchen businesses are not open to the public and as a simple workplace that doesn’t need attraction to offer, these restaurants work in an incognito mode, thus getting the name ‘Dark kitchens’. Since more food businesses choose to operate as Dark kitchens nowadays, they are set to have the same level of standards in terms of employee handling, food safety, and hygiene.
What is the Dark kitchen business model?
The Dark kitchen business model is slightly different from the conventional restaurant business model. These Dark kitchens function by having their own online platform (app/website) or accept orders through food delivery platforms like Swiggy, Zomato, etc. Most of the restaurants use Swiggy and Zomato for their online presence, where they get orders through these online portals and deliver them accordingly. The only difference lies in not using the dine-in factor.
How to start a Dark kitchen in India?
Let us see how to start a Cloud kitchen in India. The following are the factors that you should look into while setting up your Dark kitchen:
The location of the restaurant is the first point to look at. A good location is all that a Dark kitchen needs for its low investment to yield better profits. Factors like parking space, footfalls, etc., can be skipped. Though the location of the restaurant isn’t much useful for these ghost kitchens, they need a permanent address along with the required legal documents for support. The customer demography and the type of food product to sell have to be analyzed before the Dark kitchen is set in place so that the initial setup is strong.
Licensing is one of the important initial blocks of foundation that must be laid perfectly for setting up a Dark kitchen. Some of them should be procured essentially for a hassle-free operation in the first month. These include FSSAI license, GST registration, Municipal health trade licenses, Fire safety licenses, etc. Considering the FSSAI license is procured for 1 year, the total cost would come around 10,000 INR.
To know how to get your FSSAI license click here, and to know about GST registration, click here. They are really necessary for various reasons starting with Swiggy and Zomato. While Swiggy includes this in their application process, Zomato verifies these in the verification process altogether. For the other licenses, it is best to hire a dedicated agency since they are time-consuming, and you can concentrate on other chores patiently. The documents required for these licenses are:
- Restaurant registration paperwork
- Shop License
- FSSAI license
- Owner’s PAN card
The team that works for the success of a restaurant is nothing but the heart that pumps blood into a healthy body. It starts with the Chef who designs the Dark kitchen menu and makes sure that the food prepared is a delight to the customers. As Dark kitchens are online kitchens, a minimum of 5 employees are needed in total. 2 chefs, 2 helpers, and 1 housekeeper make up this team for whom the salary depends on their experience.
The average salary of a Chef at the Commis level 1 is 14000-15000 INR and that of the helpers and other staff ranges from 6000-8000 INR based on their quality of work. When it comes to the kitchen staff, 1 employee should dedicatedly handle the online and telephonic orders while a minimum of 2 employees is required for the food delivery. Partnering with third-party delivery services that work on a pre-order basis is also a good option to consider.
Once the team is set properly, it is necessary to follow a proper dress code at the workplace. This makes sure that discipline, cleanliness, punctuality, and hygiene are well maintained at the workplace. Providing employees with the essential equipment of good standards like masks, hair caps, gloves are equally important.
The next point to consider is the treatment of your employees. Since many of them have a low possibility for human interaction than their colleagues, they tend to work in cramped conditions. This leads to various health and safety-related concerns, which the management has to acknowledge and address. The lonely working environment at some of these Dark kitchens can increase stress and discomfort among employees. This stress is contagious as it spreads from the kitchen staff to the food delivery agents. Many Dark kitchens implement algorithm-driven optimization techniques to lower overheads for increased output. The management should thus be in a state to handle these business balance costs and comply with the ongoing business operations.
Setup required for a Dark kitchen
The cost to set up your Dark kitchen will vary based on the cuisine and food that you have decided to offer through the Dark kitchen menu. For example, the cost of setting up a Dark kitchen that serves food items like burgers, pizza, pasta, and sandwiches would not cost you more than 2,00,000 INR.
Procuring a combination of new and old equipment for your Dark kitchen business like tables, racks, ovens, etc., can help you save a lot of money. The cost goes up for heavy equipment like chimneys, deep refrigerators, and burners. Running multiple brands from the same kitchen will also be easy since the same equipment can be used for them as well.
The raw materials that are required to start the Dark kitchen operations depend on the type of food you have decided to offer to your customers. Hence, choosing the right vendors is very much important here. Packaging costs are separate and the budget should be allocated separately for this. Extra focus on this one is necessary since it plays a huge role in maintaining the quality of the food and setting up the brand image.
As the customer’s physical experience isn’t possible, the packaging should be in such a way that it leaves a lasting good impression. This begins with a clear view of the restaurant’s logo and your theme.
Other than these, a good Dark kitchen requires a broad line, mobile phones, high-speed internet, stationery, small counters, and chairs. Other than these, getting a Cloud Telephony subscription ensures that no customer calls are missed, and recording them can also help in training purposes.
The next parameter to focus is on the technology with which you accept and manage your online orders. This is simply because a Dark/Cloud kitchen solely relies on its online presence to stay in touch with its customers. Platforms like Swiggy, Zomato, etc, charge around 17-30% of your revenue per order and help you by accepting orders on your behalf. They also deliver the packages to your customers. Once this is over, a website/landing page with an option to order food online is highly important since it stays as one of the trust factors for customers. The Swiggy Dark kitchen is called Swiggy Access while the Zomato Dark kitchen is called Zomato Kitchen.
1. How to tie up with Swiggy Access
In Swiggy form 1:
Step 2 – Fill in the basic details like:
- Name of your restaurant
- Your Designation
- Contact Number, and click on Yes.
Step 3 – Fill in the detailed form and upload the required documents. They are:
- Restaurant’s website/online listing Link
- Number of outlets
- The primary area of your restaurant
- Normal Cost for 2 people
- Type of Cuisines
Other than these, soft copies of the following are needed:
- FSSAI License
- Shop License
- GST number/PAN details
- Pictures of the restaurant showing the exterior, kitchen, dining, samples of packaging, etc.
In Swiggy form 2:
Step 5 – While filling this form, the following documents are required as either hard copies or originals:
- Canceled cheque/passbook
- Image of your Dark kitchen menu
- Take away bill
Step 6 – Once the forms are submitted, a representative from Swiggy will contact you regarding the partnership agreement so that you can go live within the next 2-3 weeks.
Step 7 – You will soon receive a notification via email or a phone call that you have registered your restaurant as a Swiggy Dark kitchen successfully.
2. How to tie up with Zomato Kitchen
In Zomato form 1:
Step 2 – Fill in the basic form with the following information:
- Restaurant name
- Your credentials
- Contact Number
- Opening Status
Step 3 – Fill in the form keeping the following information handy:
- Google Maps location of your restaurant along with the complete address
- Characteristics of your restaurant
- Breakfast, Lunch and Dinner, Cafe, Nightlife
- Seating arrangements
- Mode of payments available
- Type of Cuisines
- Operational timings of your restaurant
- Restaurant contact Information
- Restaurant website link
- Restaurant official email ID and other miscellaneous details
In Zomato form 2:
Step 4: Your listing is now complete. Once you submit the listing, the verification process for your restaurant will begin. Once the verification is complete, your page will go live on Zomato.
Step 5: You might be contacted by a Zomato Sales Representative to cross-check the details. Now, the following documents are to be kept handy as soft or hard copies:
- Shop License
- FSSAI License
- GST number
- PAN details
What is a multi-brand Cloud kitchen?
A multi-brand Dark kitchen is nothing but a single-parent Dark kitchen providing multiple cuisines in different names from the same premises.
As dedicated Dark kitchens specialize in a single cuisine, the customer base and profit margin are lesser. Multi-brand Cloud kitchens break this by capturing a larger market and increase profits where some best examples are Faasos and Box8.
Customers always need something new or something that excites them. So understanding their perception and delivering the required cuisines is the key. In this multi-brand Dark kitchen scenario, the kitchen management is better since the inventory is effectively used and the resources are allocated evenly. Since the infrastructure is common, the investment is one-time and doesn’t cost much for experimentation. You can provide Chinese cuisines, continental cuisines, Chettinad cuisines, all from the same premise to different set of audiences.
Advantages of Dark kitchens:
- The order process is streamlined to be managed easily whether through the website/app.
- Investing in Swiggy’s or Zomato’s marketing to let people find you. This is good because though they charge a heavy commission, the online ordering platforms take care of your marketing strategy. This covers various mediums like apps, websites, TV commercials, YouTube, Search Engine Optimization, Google Ads, etc.
- Since the operational cost for ghost kitchens are comparatively lesser than traditional kitchens, the Return on Investment (ROI) can be gathered sooner.
- No worries about delivery because Swiggy and Zomato take care of it on your behalf. If not, you can use third-party delivery services.
- Online reviews on Swiggy and Zomato are a huge boost to your Dark kitchen as it helps customers to compare different restaurants easily and provides an opportunity for new ones.
- Venturing into new locations and expanding the business is easier as the risk is lesser than in the traditional food business.
- Customer service can be managed much more effectively with the tracking facilities since any trouble with delivery can be solved quickly. Providing compensation to customers for any trouble or delay is easier and helps to build the brand image.
Disadvantages of Dark kitchens:
- High commissions on Swiggy and Zomato are a major drawback in the online food delivery market since it has grown from a single-digit number to 17-30% recently. This is a huge concern for restaurants as it affects the business directly and reduces the profit margins.
- Only limited space for brand advertisement is available since various brands are emerging every day. The aggregators’ guidelines become a hurdle to your branding and marketing strategy as more and more advertisements quoting discounts can project you as a discount brand.
- This also leads to a zone where differentiating your brand becomes tough. Be it Swiggy or Zomato, price becomes the factor that shows you above the crowd. So the special experience that you provide may go unnoticed.
Alternatives to Swiggy and Zomato?
- Developing our own online food ordering system.
- Market and advertise your brand by yourself using innovative ads, catchy taglines, promotions, etc. You can get more space since there is no other brand to divert your attention.
- Tieing up with smaller players like Just Eat, TastyKhana, FoodMingo, etc., can be beneficial as they are currently less crowded and more beneficial.
- Since you don’t need to pay for 3rd party platforms, you gain the commissions that you normally spend. Money saved is money earned right!
Billing software and SlickPOS for Dark kitchens
As the workflow in Dark kitchens is primarily through the internet, a good point of sales software is highly essential to maintain records and commissions in multiple platforms like Swiggy, Zomato, etc., thereby reducing the hassle in managing regular restaurant chores like order maintenance, inventory, etc.
Other related articles
Check out our dedicated article on Cloud kitchen to know about the Cloud kitchen business model in detail.
Know how to partner with Swiggy by checking out our article on Swiggy partnership.
Know how to partner with Zomato by checking out our article on Zomato partnership.
*All product names, trademarks, and registered trademarks are the property of their respective owners.